Mool Chand Jain Vs JCIT (ITAT Delhi)
The appeals arose from orders confirming penalties imposed under Section 271DA of the Income-tax Act, 1961, for the assessment years 2018-19, 2019-20 and 2020-21. Since all three appeals involved identical facts and issues, the ITAT heard them together and treated AY 2018-19 as the lead case.
For AY 2018-19, the assessee had filed the return of income declaring income of ₹15,23,210. Subsequently, a search under Section 132 in another group of cases led to the seizure of documents relating to alleged hawala cash transactions. The case was centralised and notice under Section 153C was issued. During the assessment proceedings, the assessee admitted having made cash sales of ₹10,00,000 to M/s Balar Marketing Private Ltd., which had not been disclosed in the return of income. The Assessing Officer (AO) computed the income element at 8% under Section 44AD and added ₹80,000 to the assessee’s income. Simultaneously, penalty proceedings were initiated alleging violation of Section 269ST, and a penalty of ₹10,00,000 was imposed under Section 271DA. The Commissioner of Income Tax (Appeals) upheld the penalty, holding that the assessee had accepted cash of ₹10 lakh during the year in contravention of Section 269ST.
Before the Tribunal, it was undisputed that the assessee had made cash sales amounting to ₹10 lakh and that the assessment had been completed after estimating profit under Section 44AD based on the assessee’s admission. The Tribunal, however, examined the requirements of Section 269ST, which prohibits receipt of ₹2 lakh or more in aggregate from a person in a day, in respect of a single transaction, or in respect of transactions relating to one event or occasion, otherwise than through the prescribed banking modes.
